Cost of subsidies cut by 29pc

ISLAMABAD: The government has allocated Rs140.60 billion for subsides in the upcoming fiscal year 2016-17, which is around 29 per cent less than the amount spent in the last fiscal year.

An amount of Rs137.60bn was allocated in the previous fiscal year, but the government paid Rs196.54 billion at the end of the outgoing fiscal year. The higher amount was mainly due to increase in subsidies to Wapda/ Pepco and the K-Electric (KESC).

In the previous fiscal year, subsidy to Wapda increased significantly, showing a jump of 20pc to compensate the non-payment of electricity bills in Fata.

The government had allocated Rs6bn in terms of power subsidy to Fata in the previous fiscal year, but it finally made a payment of Rs20.86bn.

The power sector subsidy for Fata for the next fiscal year is Rs8bn. Likewise, subsidy to power consumers of Karachi too was enhanced in the outgoing fiscal year from Rs20bn to Rs53.40bn at the close of the year. The power tariff differential to K-Electric for the next budget is Rs22.60bn.

Among the major recipients of federal grants is Pakistan Railways which has been allocated Rs37bn to meet its loss.

The federal government has allocated Rs441.61bn in terms of grants to various institutions and the governments of AJK and the GB. The grants to AJK and GB governments amount to Rs29.50bn and Rs24.30bn, respectively, for next fiscal year.

Sindh and Balochistan have been made an allocation of Rs13bn and Rs10bn respectively for 2016-17.

Subsidy for Ramazan package has been reduced to Rs2bn from Rs3bn in the last fiscal year. Similarly, there is no direct subsidy for fertiliser sector. Pre­viously, an amount of Rs5bn was allocated.

The President’s Rozgar Scheme which was initiated during the mid-fiscal year 2010-11 with an allocation of Rs250 million, did not receive any contributions in the budget 2016-17. An allocation of Rs100m was made in the outgoing fiscal year.

However, actual expenditure incurred in this head was Rs260m at the end of the fiscal year 2015-16.

Besides the government has also decided to withdraw the nominal subsidy for supply of ‘salt’ to Gilgit-Baltistan while wheat subsidy to the region remains at Rs6.04bn.